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foreclosure sign Photo: Bigstock Photo: Bigstock

Because so many mortgage foreclosure actions are defended with particular zeal, and because the legal procedure (especially for home loans) is laden with traps, title companies have always been dubious about insuring such titles. Attorneys for foreclosing attorneys and sale bidders can readily attest to this. But passage of a recent statute creates a significant new impediment to title insurance for home loan mortgages devolving through a foreclosure sale.

That New York statute (RPAPL §1302-a, effective December 23, 2019) provides, in essence, that the defense of lack of standing is (no longer) waivable where the mortgage is categorized as a home loan [the definition of a home loans is found at RPAPL 1304(6)(a)], even though a defendant has neglected to raise the defense in a pre-answer motion to dismiss or in a responsive pleading. If a defendant has appeared, their ability to raise the defense continues to the moment when the hammer falls at the foreclosure auction sale.

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